Mission Foods

Case Study

T

etrad provided information that we needed to support our strategic plans and make investment decisions in new distribution and manufacturing plants

-Miguel Molina, Mission Foods

OVERVIEW

As one of the world’s biggest producers of tortillas and tortilla products, Mission Foods had become deeply acquainted with its US market over the last 35 years.

But when one of its key consumer bases, Hispanics, appeared to be declining in urban hot spots, sales and distribution director Miguel Molina knew he had to go on a fact-finding mission.

“We kept hearing these claims about immigration, and how Hispanics were shifting to other locations,” says Mr. Molina, who is based in Dallas, Texas. “Finally, my CEO said to me, ‘We need to know where these markets are moving and ensure that Mission Foods is well positioned to serve these areas.’”

Mission Foods engaged Tetrad, a geographic business solutions company, to develop a market-potential model. Mr. Molina needed solid data to guide the future of the company, which, as a division of Gruma Corporation, has manufacturing plants throughout the U.S. and -through Gruma SAB de CV, a Mexican company- has operations in Mexico, Central America, Europe, Asia, and Australia. To address their market research requirements, the tortilla manufacturer licensed Tetrad’s PCensus market analysis software. With PCensus software, Mr. Molina was able to combine his internal sales data with econometric and demographic data to visually identify the movements of their shifting consumer base.

PCensus Analyst maps shifting Hispanic populations.

“Tetrad provided information that we needed to support our strategic plans and make investment decisions in new distribution and manufacturing plants”, says Mr. Molina.

Mr. Molina knew from discussions with Mission Food’s sales force that states like California and Arizona were in fluctuation. In some urban areas, the Hispanic population appeared to be on the decline. However, census results showed that the overall Hispanic population was on the rise. Hispanics are the largest minority group in the U.S., and their numbers are projected to triple by 2050. The outstanding contradiction between dwindling urban numbers and the overall population needed to be investigated.

ANALYSIS

T

he U.S. census is only released every decade, but PCensus incorporates current year Hispanic population estimates for the periods in between. With the help of Tetrad, Mission Foods was able to measure not just Hispanic population density, but also the percentage growth or decline within that demographic. In one example, they discovered that in rural areas of Georgia and Atlanta there was an influx of Hispanics.

Mission Food’s sales staff reported anecdotal evidence from the field, which confirmed the PCensus analysis. “These areas appear to be typical hometowns in Mexico or Central America, yet it happens to be in one of the hot spots in the South East of the US. That was a big relief for me, because punching numbers is one thing. The real test is out there, in the field.”

Mr. Molina discovered that Hispanics continue to live the urban life in places like Los Angeles, Chicago, Dallas, Houston and New York. But one key discovery was that nonmetropolitan areas were on the upswing; these were places where immigration had caused a major boost in rural growth. PCensus software also enabled Mission Foods to identify potential sales in each area, based on consumption rates. “We still do excel in urban areas,” he adds. “But there was additional growth in these little mom-and-pop locations. And once you add them up, it becomes a very large market.”

Mr. Molina’s colleague corroborated some unexpected Hispanic growth patterns in Georgia with a photograph from a recent visit there.

Tetrad collaborated with Mr. Molina to develop a market-potential model enabling Mission Foods to identify the areas of highest Hispanic concentration. The model combined several demographic variables, such as ancestry, to calculate a Market Potential Index (MPI) across the entire U.S. The results of this metric were displayed on “hot spot” maps depicting the highest and lowest scoring target markets from a metropolitan macro-level, down to a localized neighborhood (block group) micro-level. The maps offered Mr. Molina instant and clear, big-picture information..

CONCLUSION

“U

sing PCensus, Mr. Molina was able to quantify consumer potential and prioritize markets” says Tetrad president Michael Simon.
“For example, Miami was known to be a strong, established market, but who knew that Georgia offered a significant opportunity for the development of a new distribution center?”